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Calculating the value of an estate

On Behalf of | Apr 11, 2023 | Estate Valuation

When you are appointed as an executor to administer an estate in Indiana, you have many responsibilities. You must distribute assets, pay debts, take care of any tax matters and handle any other tasks associated with closing out the estate.

Your first step is typically identifying the assets of the decedent’s, or the person who passed away. Once you have identified and collected the assets, they must be valued.

Why an estate valuation must be performed

The purpose of valuing the estate’s assets is so that heirs or beneficiaries know the value of the asset they are receiving and can determine any tax consequences. Knowing the value of the assets can also be helpful if any debts or taxes are owed.

You must pick a date on which to calculate each asset’s value. Commonly used dates are the date of death of 6 months after the date of death.

Once you have chosen your date, obtain financial statements showing the value on that date.

When you need experts

Valuing some assets may require the use of experts. Unique pieces of personal property, such as antiques or artwork, might require a professional appraiser.

Likewise, if the decedent owned a business, it is best to hire a professional appraiser to provide a value for the business. This can be especially important for tax purposes.

Don’t forget deductions

When calculating your values, remember to account for any deductions. For example, if you are valuing a house, subtract the amount of any owed mortgages or liens against the residence.

Additionally, the value should comprise only the decedent’s portion of the asset. A jointly owned bank account between the decedent and their still-living spouse with $100,000 in it should be valued at $50,000.

We are here to help

Handling all your responsibilities as an executor can be overwhelming and difficult when you are also grieving the death of a loved one. It can help to have the assistance and guidance of an experienced estate planning attorney throughout the process.